Hialeahs Trojan Horse For Slots Races Through Legislature

By Michael Lewis Gambling interests hyped last month’s vote to permit slot machines at Broward and Miami-Dade parimutuel sites by arguing that without slots, the area’s racetracks, dog tracks and jai-alai frontons would close.

Now that Broward County voters have permitted slots, a key strategy to get them in Miami-Dade hinges on resuscitating a closed racetrack so that it, too, could become a slots racino. Instead of slots saving the tracks, a track would reopen to save slots.

The plan is to pull Hialeah Park out of mothballs into which it was placed after the 2001 season, when owners ceased holding races, costing the track its racing permit. That plan is now in the Legislature, where a new permit is being sought.

Hialeah Park, opened in 1925 at 2100 E. Fourth Ave., sits on 210 acres in the heart of the city. Pieces of the park are designated historic by the Miami-Dade County Historic Preservation Board, and they are on the National Register of Historic Places.

But well-known as the track was to the dwindling world of horse-race bettors, it lost money for years. In 1998, when losses topped $650,000, a study requested by the Legislature recommended that the state or city buy the track and trim racing dates from 40 days to 21 to turn a profit in a tax-free, rent-free environment – because the City of Hialeah held the mortgage.

Hialeah was stumbling so badly that in 2000, it held its season at competitor Gulfstream Park to increase attendance and betting totals. It succeeded in that, but costs were so much higher that Hialeah moved back to its own track in 2001, which turned out to be its final year.

Dates for racing had always been state-regulated, but when the state ceased regulation after 2001, Gulfstream and Calder Race Course opted for dates that squeezed out Hialeah.

Now the track sees a chance for a comeback – not because it can make money as a racetrack but because it could make a fortune as a racetrack-turned-casino.

Imagine how vast a casino complex could rise on 210 acres. The 1998 state-commissioned report specifically recommended development of 25 of the track’s acres, pointing out that they could house other forms of gambling.

Hialeah and its parimutuel cohorts hope to take advantage of such an opportunity in a 2007 gambling election – and perhaps even go statewide with gambling – once staunch opponent Gov. Jeb Bush leaves office and revenues from the soon-to-open Broward County slot-machine industry fill bank accounts.

Hialeah, which strongly rejected slot machines in March, will face heavy lobbying that will suggest major economic benefits from a healthy Hialeah Park fueled by slots and perhaps other forms of gambling. And a fourth parimutuel in the county would help fund ads to woo voters.

Expect a massive campaign. Wave after wave of misleading pro-slots flyers and TV advertising battered voters in this year’s election.

But then, the jackpot would be massive. The exact scope of the windfall to parimutuel owners will become clearer once the Legislature sets tax rates and regulatory details for Broward’s slots. Those rules would probably apply elsewhere in Florida were slots allowed to spread.

The House and Senate are arguing how much to tax slots profits – anywhere from 30% to 55%. That still will hand operators hundreds of millions a year – far more than enough to prop up an expired Hialeah Park as a Trojan horse in the quest for still more.